Measuring Macroeconomic Activity IV (Nominal and Real Values)

Question 1

Nominal GDP

Answer 1

Nominal GDP = ∑ P(i,t) • Q(i,t) i = Good

t = period

Question 2

Real GDP in t (Laspeyres approach)

Answer 2

Y(t) = ∑ P(i,0) • Q(i,t)

Question 3

growth rate of real GDP in t (Laspeyres)

Answer 3

1 + g(Y(t)) = ∑ P(i,0) • Q(i,t)
————————
∑ P(i,0) • Q(i,t-1)

Question 4

Real GDP in t (Paasche approach)

Answer 4

Y(t) = ∑ P(i,T) • Q(i,t)

Question 5

growth rate of real GDP in t (Paasche)

Answer 5

1 + g(Y(t)) = ∑ P(i,T) • Q(i,t)
————————
∑ P(i,T) • Q(i,t-1)

Question 6

growth rate of Real GDP in t with chain weight

Answer 6

1 + g(Y(t)) = Wurzel aus {growth of real GDP (L) • growth of 
                   real GDP (P)}

Question 7

Annual Laspeyres

Answer 7

∑ P(i,t-1) • Q(i,t-1)

Question 8

Annual Paasche

Answer 8

∑ P(i,t) • Q(i,t-1)

Question 9

growth rate of real GDP in t with annual chain weight

Answer 9

1 + g(Y(t)) = Wurzel aus {annual Laspeyres • annual

Paasche}

Question 10

GDP deflator-based price level

Answer 10

Price Level(t) = P(t) =          Nominal GDP(t)
                                          --------------------------
                                               Real GDP(t)

Question 11

GDP deflator-based rate of inflation

Answer 11

Rate of Inflation = π(t) =

(Percantage change in nominal GDP) -
(Perlentage change in real GDP) {both from t-1 to t}